J&J withdraws from norastemizole collaboration with Sepracor

Johnson & Johnson has pulled out of its collaboration with Sepracor onthe development of an improved, single-isomer version of J&J's antihistamine Hismanal (astemizole). Sepracor has been working with J&J on norastemizole, which was designed to overcome the side effects seen with Hismanal, including cardiac effects such as QT interval prolongation. Sepracor's share price slipped 15% to $78.75 on the announcement, although the company insists that it can continue to develop the drug on its own and is on target for a New Drug Application submission for allergic rhinitis next year. As the Marketletter went to press, Sepracor's stock had recovered somewhat to just under $80.

J&J has essentially pulled out of a copromotion deal for norastemizole and will now receive royalties on sales in exchange for granting Sepracor access to its intellectual property on the drug. Sepracor is free to appoint another copromotion partner, and one commentator has suggested that an ideal candidate would be Glaxo Wellcome, which has a broad respiratory franchise but no nonsedating antihistamine product. There are considerable synergies to be had when a firm markets a full range of respiratory drugs, he noted.

The reasons for J&J's decision are believed to be the lack of synergy with other J&J products (Hismanal is its only antihistamine and has been rapidly losing market share in recent years, now having just 3% of sector sales) and the high cost of entry into the branded antihistamine market. Sepracor would not comment on the size of the royalty to J&J.